Fuel used on farms

From the 2024 DOR Tax Exemption Study

82.08.865; 82.12.865 - Fuel used on farms Description Diesel fuel, biodiesel fuel and aircraft fuel sold to a farmer or a person who provides horticulture services for farmers are exempt from sales and use taxes. The fuel may not be used on public highways or for heating of water or space for human habitation. Purpose Supports Washington farmers and those who use aircraft on their farms for crop dusting. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $36.493 $39.881 $41.861 $43.940 Local Taxes $10.550 $11.529 $12.102 $12.703 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $36.559 $41.861 $43.940 Local Taxes $0.000 $9.610 $12.102 $12.703 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Average growth rate over the last 10 years for fuel consumption by farmers is 5%. - Price of Washington retail diesel price mirrors the Office of Financial Management forecast. - Local revenue estimates use the rural average local sales and use tax rate of 1.88%. Data Sources - D